EC's VP, Valdis Dombrovskis, congratulated Portugal and six other countries where non-performing loans reduced by 3% or more.

The European Commission on Wednesday commended the “considerable” financial stability in the European Union, highlighting the reduction of the loan loss, namely in Portugal, and appealed for the faster development of the Capital Market Union (CMU).

In the presentation of the third interim report on the progress made in risk reduction, essential for the conclusion of the banking union, vice-president Valdis Dombrovskis, responsible for the Financial Stability, Financial Services and the CMU included Portugal in a lot of six countries where the reduction of non-performing loans was 3% or more.

“The report shows that the financial stability was considerably strengthened in recent years and the risk reduction in the EU banking sector continues at a sustained pace,” Dombrovskis said. “In just one year, the non-performing loans declined 1.2% at a community level, now standing at around 3.4%. In Croatia, Cyprus, Hungary, Ireland, Portugal and Slovenia we found reductions of 3% or more.”

Dombrovskis praised “the good news” and recalled that “a lower percentage of non-performing loans meant that banks are more stable and profitable.”

Brussels said that while efforts are needed to address the problem inherited from the financial crisis that continue to weigh on the sector, the results are very “encouraging”.

For Brussels, CMU will offer greater choice for consumers, who can access cheaper and higher quality investment products, and enable financial service providers to develop and offer their services in other member states.

The commission has therefore called for a new political commitment and greater effort to complete the foundations of the CMU before the European elections on May 2019.